Tax authorities clarify rules for school deductions and refund compensations

Tax authorities have issued guidance regarding educational deductions and the mechanics of tax refunds. In Mexico, the Tax Administration Service (SAT) noted that individuals can deduct certain school-related expenses from their annual tax returns, provided they meet specific requirements.

Deductible expenses include tuition at private institutions with official validity and, under certain conditions, mandatory school transportation. The SAT sets annual deduction limits based on educational levels: 14,200 pesos for preschool, 12,900 for primary, 19,900 for secondary, 17,100 for technical professional studies, and 24,500 for high school.

Separately, tax agencies may not issue a direct refund even if a tax return results in a surplus. This occurs when authorities automatically compensate the refund amount against outstanding debts owed to the tax office or other linked public organisms. For example, self-employed workers may see their income tax refunds applied to settle deferred VAT payments.